Tackling inflation is priority, Putin says

The Finance Ministry has proposed tackling Russia's high inflation rate by curbing the burgeoning volume of money that state companies borrow overseas, a ministry official said Wednesday. President Vladimir Putin has made tackling inflation a priority, as high oil revenues threaten to flood the economy with petrodollars and drive up inflation, forecast to reach 11.5 percent this year.

The anti-inflation proposals were being worked on jointly with the Economic Development and Trade Ministry, the ministry official said on condition of anonymity, due to the sensitivity of the discussions.

A spokesman for the Economic Development and Trade Ministry declined comment.

State natural gas monopoly Gazprom and Rosneft state oil company planned to borrow nearly US$20 billion (Ђ17 billion) from foreign lenders. The Finance Ministry said those funds could stimulate the growth of the domestic money supply, keeping inflation high.
A.M.